A Conversation with San Diego Gas and Electric:

Me: Hello, San Diego Gas and Electric? I’ve had trouble getting through on the phone. I guess you must be fielding a lot of calls lately. I have several questions, but don’t worry. I’ll fill in your answers for you.

Me: First topic. SDG&E is committed to renewable energy, right?

SDG&E: Of course. We are actively installing wind and solar plants right now. We are required to have 20% of our electricity from renewable sources by 2020.

Me: That’s great! Are you using local companies for these projects to bring revenue to California? I know there are hundreds of wind and solar companies in the state.

SDG&E: Well, not exactly. The projects will provide jobs in California, but both contracts have been awarded to companies with headquarters in France.

Me: I see. That doesn’t seem right, but let’s move on. You are a utility company, right? What does that mean?

SDG&E: Yes. We provide a service most people need to function in modern society. Other utilities are things like cable TV and phone service.

Me: Thanks. Now, if I’m unhappy with my phone or cable service, I can choose to cancel my service and switch to another company. I get offers for that in the mail every day. If I’m not happy with my service from SDG&E and want to cancel, what other company can I use in San Diego?

SDG&E: Actually, we are the only electric company in the area. We control all the power lines, substations, and other equipment. You don’t have a choice.

Me: Thanks, I just wanted to make sure. I was pretty upset about that blackout a few weeks ago. By the way, I see on my bill that there is a fee for “Reliability Services.” Am I going to get a refund for that because of the blackout?

SDG&E: Next question please.

Me: Now I see on the news that there is a big debate over residential solar systems. You claim that a person who is connected to your utility grid is costing you over $1100 a year. Is that correct?

SDG&E: Yes, so we are trying to impose a fee on those solar customers. We already charge them a $5 per month connection fee, but that is not nearly enough. We want to charge them an additional 3-4 cents per kilowatt hour.

Me: I see. How does it work right now when someone who has solar power is connected to your utility grid?

SDG&E: We set them up with a Net Metering agreement. They get credits for any kilowatt hours they produce during the day over the amount they use. They can use these credits at night or anytime they need extra electricity. If they need even more electricity, they get it from us. We settle up with them once a year.

Me: That seems fair. What happens if they settle up at the end of the year and they have credits for producing more kilowatt hours than they used?

SDG&E: We pay them 3.4 cents per kilowatt hour.

Me: So if they produced an extra 1000 kilowatt hours, you would send them a check for $34?

SDG&E: That is correct.

Me: And what if they don’t produce as much as they use? What if they ended up owing you for 1000 kilowatt hours?

SDG&E: Then we charge them for those kilowatt hours at our Baseline rate of 14 cents per kilowatt hour. They would owe us $140.

Me: Let me get this straight. Let’s say there are two homes next to each other with Net Metering agreements. If one overproduces 1000 kilowatt hours, you pay them $34, but charge their neighbor $140 for using the same 1000 kilowatt hours of electricity?

SDG&E: That is exactly how it works right now.

Me: Then it seems to me that solar customers are providing you with electricity you can sell for a substantial markup. I fail to see how they are costing you extra money, so let’s keep going.

Me: Does everyone pay 14 cents per kilowatt hour for their electricity?

SDG&E: That is only for the first few hundred kilowatt hours and depends on where they live. After that we increase their rate to 17 cents, then 31 cents, and finally 33 cents per kilowatt hour.

Me: So the more electricity someone uses, the more you charge them per unit of electricity? That seems to go against the laws of supply and demand.

SDG&E: That’s how it works. Customers who are conservative users get a huge price break and heavy users are severely penalized.

Me: Tell me about Time-of –Use metering.

SDG&E: This is something we do for businesses now and want to impose on residential customers in the near future. Basically, it costs us a lot of money to provide enough electricity to keep up with peak demand during the day. With TOU metering, we charge people a lot more for electricity used during the day(On-Peak) and less for electricity used at night (Off-Peak).

Me: So would you say this is actually providing people with an incentive to use less electricity from your grid during the day and more electricity at night?

SDG&E: Definitely.

Me: Then would it be reasonable to say that an ideal customer would use no or very little electricity during the day and draw most of the power they need at night?

SDG&E: Yes. It saves us a lot of money by decreasing our peak demand so we pass the savings on to our customers.

Me: Understood. When it comes to your customers with solar electricity, when are they feeding their extra power into your grid?

SDG&E: During the day.

Me: And when do they draw power from the grid?

SDG&E: At night.

Me: So they provide you with extra power during peak hours and draw their electricity at night when it is less expensive for you to provide it?

SDG&E: Yes.

Me: Ok, I just want to be perfectly clear on this. A customer who is tired of paying your ever-increasing electricity rates goes out and spends thousands of dollars on a solar electric system. This system provides them with the electricity they need during peak hours, reducing demand on your grid. It also has the potential to provide extra power you can sell to other customers at a 400% markup. You now want to charge them hundreds of dollars in additional fees per year.

SDG&E: That is correct.

Me: In that case, you may want to contact your utility company. I’m guessing that somewhere in that 21-story skyscraper downtown, gas is leaking at an alarming rate.

Adam Garcia 92104

Comments

Visduh Oct. 17, 2011 @ 9:10 p.m.

One of the best and clearest explanations of all this controversy. You'll never hear SDGE or a solar supplier being so candid about the imbalances in the current system. Could it be they know things we do not know?

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Lee_Schavrien Oct. 31, 2011 @ 9:26 a.m.

The “answers” provided by the author bear little resemblance to the facts. While I understand the concept of literary license, and it was clear the article was written with tongue-in-cheek, in the best interests of your readers -- and our customers -- I’d like to set the record straight.

Here is what I would have said, had you asked me:

You (The Reader): SDG&E is committed to renewable energy, right?

Me (SDG&E): Absolutely. Just this year, SDG&E has signed more than 14 renewable energy contracts for a total of about 1,280 megawatts (MW) of wind and solar from companies in San Diego, Northern California, and Arizona. About 250 MW will be produced by projects built in San Diego County, with another 920 MW generated by projects in Imperial County.

That French company you mentioned -- Soitec -- has committed to building a factory in San Diego County to manufacture the specialized solar panels for several of those projects. At full capacity, Soitec’s San Diego area operations should generate up to 450 local jobs. Based on all of the contracts we have signed to date, we are close to meeting the goal to have 33% of our electricity portfolio from renewable resources in 2020.

You: You are a utility company, right? What does that mean?

Me: SDG&E provides natural gas and electricity service to more than 3 million people throughout our 4,100-square mile service territory that stretches from the U.S.-Mexico border to Southern Orange County. For the past five years straight, we have been named the “best in the West” for electric reliability.

You: I was pretty upset with that blackout a few weeks ago. Am I going to get a refund for that?

Me: On Sept. 8, due to the Pacific Southwest outage, power went out for more than 5 million people, including those in SDG&E’s service area and some of Southern California Edison’s customers, as well as people in Arizona, Imperial County, and Baja California. It was a cascading outage that started at a substation near Yuma. But our system responded as designed to prevent an even more widespread outage and avoid damage to the electrical system. And SDG&E employees worked through the night to restore service to all SDG&E customers in 12 hours -- for some customers even sooner -- after an outage that could have lasted two days or more.

You: Now I see on the news there is a big debate over residential solar systems. You claim that a person connected to your utility grid is costing you over $1,100 a year. Is that correct?

Me: Today, about 14,500 net energy metering customers who have rooftop solar on their homes or businesses do not pay a penny for using the utility’s electricity network to deliver power to their homes and businesses before the sun is up and after it sets. Those avoided costs are shifted to about 350,000 customers -- those in Tiers 3 and 4 (because rates for Tiers 1 & 2 were capped by state law). That amounts to a subsidy of about $1,100 a year per solar customer.

You: It seems to me that solar customers are providing you with electricity you can sell for a substantial mark-up. I fail to see how they are costing you money, so let’s keep going.

Me: SDG&E does not buy energy from solar customers, and we don’t sell to others whatever energy solar customers produce but don’t use immediately. Instead, that energy is credited to those solar customers who pay only for any kilowatt-hours they use net of what they generate. Many solar marketers use the benefits of “net metering” as a marketing tool, describing it as the equivalent of electricity storage. SDG&E also does not take in any more revenue as a result of the changes we’ve proposed. The change is who pays for services solar customers now get free. The network use charge would help to ensure that all customers get what they pay for and pay for what they get.

Many solar customers think they’re “off the grid” because they produce energy with rooftop PV. The reality is they still need -- and use -- SDG&E’s electricity network to send their solar generation to the grid and to deliver power when their solar unit is not producing. Today, they pay nothing for this service. And, they don’t pay for the customer-assistance programs that are part of the “bundled” rate all non-solar customers pay. Is that fair? We don’t think so. What’s fair is requiring all customers to pay on the same basis for the services they receive.

Lee Schavrien, SDG&E Senior vice president of finance, regulatory & legislative affairs 92123

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tomjonessjc Nov. 2, 2011 @ 4:45 p.m.

I am an SDG&E customer and have a rooftop photovoltaic installation on my home. I take issue with a number of Lee Schavrien’s comments.

Schavrien writes, “SDG&E does not buy energy from solar customers, and we don’t sell to others whatever energy solar customers produce but don’t use immediately.”

Mr. Schavrien is implying that the excess energy I produce isn’t consumed or is simply given away. That’s absolutely untrue! The excess power produced by a solar customer is put to use by my neighbors. SDG&E bills my neighbor for it, at the going rate, but SDG&E did not produce or distribute that energy over their transmission lines.

Schavrien writes, “Instead, that energy is credited to those solar customers who pay only for any kilowatt-hours they use net of what they generate”.

Of course. Is Mr. Schavrien implying that this is somehow unfair?

Schavrien writes, “Many solar marketers use the benefits of ‘net metering’ as a marketing tool, describing it as the equivalent of electricity storage.”

That is technically correct. If a solar customer had a battery system to charge during the day and discharge at night then they would be “off the grid.” By the way, that’s the acid test for off-the-grid use, and SDG&E’s solar customers know that. But California’s net metering legislation allows solar customers to use the SDG&E grid as their battery. That’s good for everyone, including SDG&E, because it allows the utility to avoid brownouts during peak usage periods and, by keeping electric generation local, keeps traffic off the grid.

Schavrien writes, “SDG&E also does not take in any more revenue as a result of the changes we’ve proposed.”

If that were true, why would SDG&E even go to the trouble of making the change? SDG&E is a corporation and a monopoly. The idea that such an entity would care about fairness is laughable and counter to the corporate profit motive. This change is about profit, pure and simple.

Continued in next post

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tomjonessjc Nov. 2, 2011 @ 4:47 p.m.

Schavrien writes, “The change is who pays for services solar customers now get free. The network use charge would help to ensure that all customers get what they pay for and pay for what they get.”

Anyone who looks at my monthly bill can see that nothing is free for solar customers or anyone else. First, over a ten year history, I continue to pay about half of what I did before adding solar. Second, every nickel and dime you charge each customer for all the miscellaneous things to pad your bottom line – bond interest, transmission, distribution, nuclear decommissioning, etc. -- are there in my bill. So, drop all the talk about “free.” Schavrien writes, “Many solar customers think they’re ‘off the grid’ because they produce energy with rooftop PV.” Again, that’s a simple test for a solar customer. If he or she does not have batteries, s/he is on the grid. Many people considering solar probably don’t understand this, but those with existing solar installations almost certainly DO understand. It’s the height of arrogance to claim that your customers don’t understand these things. Schavrien writes, “The reality is they still need -- and use -- SDG&E’s electricity network to send their solar generation to the grid and to deliver power when their solar unit is not producing. Today, they pay nothing for this service. And, they don’t pay for the customer-assistance programs that are part of the ‘bundled’ rate all non-solar customers pay. Is that fair? We don’t think so. What’s fair is requiring all customers to pay on the same basis for the services they receive”. I’d like to invite Mr. Schavrien to view my bill and show me what I’m getting that’s supposedly “free.” Obviously SDG&E thinks very little of their 14,500 net energy metering suppliers. Yes, we are suppliers. We are suppliers who have the net metering law on our side! Tom Jones San Juan Capistrano

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RadioGuy Nov. 5, 2011 @ 3 p.m.

Mr. Schavrien didn't mention that the renewables sourced from the Imperial valley will be shipped to San Diego via the new Sunrise Powerlink transmission line. This particular 1000 MW transmission project is estimated to cost about 2 billion dollars. Mr. Schavrien wants you to believe SDG&E is committed to delivering renewable energy to its customers but it's more accurate to say SDG&E is committed to maximizing the profitability of delivering renewables to customers. If our interest was clean energy alone there was no need to spend 2 billion dollars because the solar panels could have been placed on homes and businesses. 2 billion dollars!!!! This project alone will have rate payers spending hundreds of millions of dollars a year paying off the loan, interest and profit to SDG&E. Outrageous.

The idea behind SDG&E's change in the rules is not completely without merit. Some of the per kWh distribution fees could be shifted out of the energy charge and made a fixed monthly access charge. If properly implemented this would be revenue neutral and provide a healthy price signal to the market. Hypothetically a non-solar customer that previously paid 15 cents/kWh for 500 units could pay 12 cents/kWh plus a grid a $15 monthly grid access fee. This sort of change should only marginally change the economics of owning a solar system.

I'm having a hard time understanding how grid access fees for solar owners could possibly be an extra $1000/year?

I'd encourage San Diegoians to actively oppose this. Send the story into the news programs. Write editorials. Feed the story to all the green blogs around the US. Get the facts out. Get your anger and frustration out. Push back and push hard.

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